VZCZCXYZ3039
RR RUEHWEB

DE RUEHRB #0826/01 2791653
ZNR UUUUU ZZH
R 061653Z OCT 09
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC 0712
INFO RUCNMGH/MAGHREB COLLECTIVE

UNCLAS RABAT 000826 
 
SIPDIS 
 
STATE FOR NEA/MAG, NEA/PI, EB/TPP/BTA 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ECON PREL MO
SUBJECT: Eizenstat promotes bilateral FTA, Maghreb 
regional integration 
 
¶1.  Summary: During an October 1 conference in 
Casablanca on the U.S.-Morocco Free Trade Agreement 
(FTA), former senior USG official Stuart Eizenstat 
discussed opportunities for increasing bilateral 
trade between Morocco and the U.S., and for 
bolstering U.S. FDI in Morocco.  He also proposed 
reinvigorating his late-nineties initiative to 
promote Maghreb regional integration and deepen the 
relationship between the U.S. and the Maghreb, noting 
that this initiative had renewed importance given the 
rise of extremism in the region.  Eizenstat also 
presented his ideas at a dinner with six Moroccan 
ministers (interior, agriculture, energy, industry, 
trade, finance), as well as Moroccan notables ranging 
from Royal Adviser Andre Azoulay to intelligence 
chief Yassine Mansouri.  End summary. 
 
¶2.  On October 1, A/DCM Ranz attended a conference in 
Casablanca on the U.S.-Morocco FTA, co-hosted by the 
Office Cherifien des Phosphates (OCP, the government- 
owned phosphate monopoly) and the Confederation 
Generale des Entreprises du Maroc (CGEM, the most 
important private sector organization in Morocco). 
Moroccan conference attendees included recently- 
elected CGEM head Mohamed Horani, OCP Director 
Mostafa Terrab, and former Finance Minister and 
current Rabat mayor Fathallah Oualalou. 
 
¶3.  In his keynote address, Eizenstat was blunt that 
the FTA could not function independently of the 
broader business environment, citing Morocco?s low 
ranking on the World Bank?s Doing Business index, and 
Transparency International?s corruption index.  He 
also underscored the importance of improving 
Morocco?s poor education system.  He suggested (and 
Moroccan business leaders in attendance agreed) that 
Morocco should reconsider its currency mechanism, 
which resulted in a too-strong dirham and thus 
reduced the competitiveness of Moroccan exports.  On 
the positive side, he noted that Morocco was one of 
only two countries (Jordan being the other) enjoying 
essentially free-trade status with both the U.S. and 
Europe, making it a perfect export platform for 
investors interested in trade with both markets. 
 
¶4.  Eizenstat acknowledged that full regional 
integration in the Maghreb was impossible absent a 
solution on Western Sahara, but argued that the 
business communities did not need to wait for 
?nirvana.?  He proposed regional cumulation of origin 
(for which no legislation was needed, he said) and 
Economic Integration Zones (similar to the Israel- 
Jordan and Israeli-Egypt Qualifying Industrial Zones, 
which would require legislation in both countries) as 
potential first steps.  Several Moroccan business 
leaders in attendance responded that they had tried 
to establish business partnerships with eager and 
willing Algerian counterparts, but that the Algerian 
Government had intervened and prevented culmination 
of their deals. 
 
¶5.  Eizenstat argued that there was an even greater 
sense of urgency now for regional integration than 
when he first launched his initiative in the late 
1990s.  The population bulge throughout North Africa, 
and the high rate of urban unemployment, were a 
recipe for an explosion in crime and extremism.  He 
returned several times to this core theme: regional 
integration was the key to avoiding the growth of 
extremism.  He listed several sectors that were ripe 
for regional cooperation, including: sustainable 
water supply, unified transportation networks, 
regional energy policy, agribusiness, and financial 
services. 
 
¶6.  Researchers from the Petersen Institute for 
International Economics presented the findings of 
their recent, OCP-funded study, "Capitalizing on the 
Morocco-US Free Trade Agreement: A Road Map for 
Success," which focuses on trade and investment 
opportunities in agriculture, textiles, services and 
aviation, and uses Chile and Jordan as models for 
successful FTA implementation.  CGEM also presented 
some of its recent findings on obstacles to full 
utilization of the FTA, which were published earlier 
this year in a report prepared by the French firm 
Roland Berger. 
 
¶7.  In his conclusion, Eizenstat reiterated that 
countries that had done well with FTA implementation 
 
had paired it with improvements in their business 
climates through serious reform efforts and 
institution building.  He pushed for the USG to be 
more proactive in promoting regional integration, and 
specifically to press publicly for opening borders 
and regularizing trade between Morocco and Algeria. 
The regional players needed the "catalyst" of USG 
intervention, he averred. 
 
¶8.  For its part, the GOM needed an office and 
individual responsible for FTA implementation, 
Eizenstat said, noting that this model had been the 
key to success elsewhere.  This office should invite 
a team of Petersen Institute and CGEM researchers 
involved in studying FTA implementation to present 
their findings in greater detail, "drill down" into 
their recommendations, and come up with an 
implementation plan. 
 
¶9.  Eizenstat thought the Moroccan private sector 
needed to do more to promote itself by teaming up 
with American business organizations like the U.S. 
Chambers of Commerce and National Association of 
Manufacturers to sensitize American companies to the 
benefits of the FTA.  Eizenstat also pushed the 
private sector to "establish a presence" in the U.S., 
by opening up trade missions in selected key American 
cities.  Finally, he suggested that the private 
sector establish a single location in Casablanca 
where Moroccan enterprises could find everything they 
needed to know about doing business with the U.S. 
 
Kaplan